Claim that 129 mil­lion could be de­nied health cov­er­age doesn’t match re­al­ity

The Washington Post Sunday - - POLITICS & THE NATION -

“Once again, 129M peo­ple with pre­ex­ist­ing con­di­tions could be de­nied cov­er­age and in­sur­ers could charge sick peo­ple more money.” — Sen. Ka­mala D. Har­ris (D-Calif.), in a tweet, May 4, 2017

As part of a tweet storm con­demn­ing the House Repub­li­can bill to over­haul the Af­ford­able Care Act, Sen. Ka­mala D. Har­ris (D-Calif.) re­lied on a talk­ing point that a num­ber of Democrats have used when at­tack­ing the changes that pro­posed leg­is­la­tion would make con­cern­ing the han­dling of pre­ex­ist­ing med­i­cal con­di­tions in the in­di­vid­ual mar­ket.

But there are some sig­nif­i­cant prob­lems with the 129 mil­lion fig­ure and the as­ser­tion that peo­ple would be de­nied cov­er­age.

The Facts

First of all, let’s re­mind our­selves of the nar­row scope of the pre­ex­ist­ing pro­vi­sion in the Amer­i­can Health Care Act. Orig­i­nally, in an ef­fort to keep peo­ple buy­ing health in­sur­ance, the leg­is­la­tion had a re­quire­ment that peo­ple not have a lapse in cov­er­age or they risk a 30 per­cent in­crease in pre­mi­ums for one year. The bill that passed in­cluded an amend­ment that would al­low states to seek waivers from this “con­tin­u­ous cov­er­age” pro­vi­sion.

In­stead, if the state met certain con­di­tions, in­sur­ance com­pa­nies for one year could con­sider a per­son’s health sta­tus when writ­ing poli­cies in the in­di­vid­ual mar­ket. An­other pos­si­ble waiver would al­low the state to re­place a fed­eral es­sen­tial-ben­e­fits pack­age with a more nar­rowly tai­lored pack­age of ben­e­fits, lim­ited to the in­di­vid­ual and small-group mar­kets.

Thus, four things would need to hap­pen be­fore some­one would be af­fected: You live in a state that seeks these waivers; have a lapse in health cov­er­age for longer than 63 days; have a pre­ex­ist­ing con­di­tion; and buy in­sur­ance on the in­di­vid­ual mar­ket.

A per­son who fell into this cat­e­gory would face in­sur­ance rates that could be based on their in­di­vid­ual con­di­tion, for one year. (States that seek a waiver would need to pro­vide ways to help make up the dif­fer­ence in costs.) Af­ter that, peo­ple would qual­ify for prices at the com­mu­nity rate, rather than based on their in­di­vid­ual con­di­tions.

The in­di­vid­ual mar­ket serves about 18 mil­lion peo­ple. So where did Har­ris get the 129 mil­lion fig­ure?

The sen­a­tor was re­ly­ing on a some­what dated 2011 es­ti­mate from the De­part­ment of Health and Hu­man Ser­vices. That re­port said that 50 mil­lion to 129 mil­lion (19 to 50 per­cent of) non-el­derly Amer­i­cans have some type of pre­ex­ist­ing health con­di­tion.

Just be­fore the Obama ad­min­is­tra­tion left of­fice, HHS pub­lished an up­dated ver­sion of the re­port, which said 61 mil­lion to 133 mil­lion (23 to 51 per­cent) of non-el­derly Amer­i­cans have pre­ex­ist­ing con­di­tions. The dif­fer­ence in the num­bers de­pends on the def­i­ni­tion that is used. The more nar­row def­i­ni­tion is based on el­i­gi­bil­ity of state-run high-risk pools that pre­dated Oba­macare — which might reemerge as an op­tion un­der the GOP plan for peo­ple in a waiver state and with a lapse in cov­er­age. The broader def­i­ni­tion in­cludes health con­di­tions (such as arthri­tis) or be­hav­ioral health dis­or­ders (such as sub­stance abuse) that might have re­sulted in denial of cov­er­age or higher pre­mi­ums.

Har­ris, ob­vi­ously, chose the high-end es­ti­mate.

There are other es­ti­mates as well, such as a Kaiser Fam­ily Foun­da­tion study that said 27 per­cent of adult Amer­i­cans younger than 65 have “health con­di­tions that would likely leave them unin­sur­able if they ap­plied for in­di­vid­ual mar­ket cov­er­age un­der pre-ACA un­der­writ­ing prac­tices that ex­isted in nearly all states.” This num­ber is more con­ser­va­tive in part be­cause the sur­vey did not have enough de­tail on some ill­nesses (such as HIV/AIDS) that be­fore Oba­macare would have left some­one with­out in­sur­ance.

Mean­while, a 2010 in­ves­ti­ga­tion by the House En­ergy and Com­merce Com­mit­tee, based on doc­u­ments from the four largest for-profit health in­sur­ers, found that com­pa­nies de­nied cov­er­age to one out of ev­ery seven ap­pli­cants. That would be 14 per­cent. So even if you took the en­tire U.S. pop­u­la­tion with health in­sur­ance — about 257 mil­lion peo­ple — that means 34 mil­lion would face a denial of cov­er­age. Within the in­di­vid­ual mar­ket — as­sum­ing ev­ery state sought a waiver — the re­sult would be 2.5 mil­lion, as­sum­ing they all ex­pe­ri­enced a lapse in cov­er­age of more than two months.

But, as we noted, the in­di­vid­ual mar­ket is just one­sev­enth the size, with em­ploy­er­pro­vided plans (half of Amer­i­cans), Medi­care and Medicaid un­af­fected by the pro­vi­sion. (Medicaid, as we have re­ported, would face steep cuts in funds.)

Har­ris’s staff em­pha­sized that she said 129 mil­lion “could” be de­nied cov­er­age: “They could be de­nied cov­er­age if they lost their em­ployer cov­er­age and the po­ten­tial cuts from Medicaid would even­tu­ally put a bunch of peo­ple at risk, as well.”

Har­ris’s staff also pointed to re­port­ing in the Wall Street Jour­nal that be­cause of a po­ten­tial in­ter­ac­tion be­tween fed­eral reg­u­la­tions and the law, em­ployer-pro­vided in­sur­ance could be af­fected, specif­i­cally that em­ploy­ers could again im­pose life­time lim­its for cat­a­strophic ill­nesses. Again, that would af­fect a rel­a­tively small num­ber of peo­ple with med­i­cal bills over, say, $1 mil­lion.

Repub­li­cans say the con­cern is overblown. “The waiver does not ap­ply to the large-group mar­ket,” said Zach Hunter, a spokesman for the House En­ergy and Com­merce Com­mit­tee. “The MacArthur amend­ment ex­plic­itly al­lows states to seek a waiver for es­sen­tial health ben­e­fits only for the in­di­vid­ual and small-group mar­ket, and it will have no ef­fect on the large-group (em­ployer) mar­ket. Any am­bi­gu­ity caused by pre­vi­ous ad­min­is­tra­tions’ guid­ance from HHS could be re­solved by Sec­re­tary [Tom] Price.”

An HHS spokes­woman told the Jour­nal that the waiver on es­sen­tial ben­e­fits ap­plied only to the in­di­vid­ual and small­group mar­kets. “Should the AHCA be­come law, the De­part­ment of Health and Hu­man Ser­vices will ad­min­is­ter it in line with both the ex­plicit text of the bill and its in­tent,” Alleigh Marré said.

As for Har­ris’s claim that peo­ple could be de­nied cov­er­age, that’s false. The AHCA does not change the ACA’s guar­an­tee of cov­er­age. The rule for de­bat­ing the amend­ment ac­tu­ally in­cluded a line to clar­ify any pos­si­ble am­bi­gu­ity — that “noth­ing in this Act shall be con­strued as per­mit­ting health in­sur­ance is­suers to limit ac­cess to health cov­er­age for in­di­vid­u­als with pre­ex­ist­ing con­di­tions.”

Har­ris’s staff says the lan­guage in the tweet re­ferred to the pos­si­bil­ity that peo­ple would be “ef­fec­tively de­nied cov­er­age” be­cause they could not af­ford it. This line of rea­son­ing was based on the no­tion that the House GOP bill, as drafted, could lead to a death spiral be­cause of the con­tin­u­ous-cov­er­age pro­vi­sion, with the sta­bi­liza­tion funds un­able to help peo­ple cover their costs dur­ing the one-year pe­riod when they are not in the com­mu­nity-rated pre­mium pool. But the CBO re­port said that the AHCA, as orig­i­nally struc­tured, could “at­tract a suf­fi­cient num­ber of rel­a­tively healthy peo­ple to sta­bi­lize the mar­ket.” (CBO also said, con­trary to GOP claims, that the Oba­macare mar­kets were also sta­ble.) A CBO re­port on the fi­nal bill will be re­leased this week.

The Pinoc­chio Test

The use of the word “could” does not get Har­ris off the hook. As cur­rently drafted, the pro­vi­sion af­fects a rel­a­tively small por­tion of the health in­sur­ance mar­ket — and even then, sev­eral fac­tors would need to play out be­fore a per­son faced an is­sue. More­over, the Repub­li­can plan specif­i­cally sets aside bil­lions of dol­lars to help states cre­ate high-risk or in­vis­i­ble health pools to as­sist peo­ple if their health con­di­tion re­sults in higher pre­mi­ums or loss of cov­er­age dur­ing the oneyear tran­si­tion pe­riod. It’s a valid ques­tion about whether the funding is ad­e­quate, but that’s dif­fer­ent from as­sum­ing there is no funding at all.

Yet Har­ris uses a very high fig­ure to sug­gest that ev­ery­one with a pre­ex­ist­ing con­di­tion is at risk. The gap be­tween her num­ber and the re­al­ity of who might be af­fected is too large to ig­nore. She earns Four Pinoc­chios.


Sen. Ka­mala D. Har­ris (D-Calif.) talks to com­mu­nity mem­bers last month at a church in Los An­ge­les. Har­ris has re­lied on a some­what dated es­ti­mate of the num­ber of peo­ple with pre­ex­ist­ing con­di­tions.

The Fact Checker GLENN KESSLER

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